After years of playing also-ran, Sacramento has surged to a lead position in its bid for Major League Soccer. What happened? It’s about the money.
In an exclusive interview about Sacramento’s five-year effort to join the nation’s premier professional soccer league, MLS Commissioner Commissioner Don Garber told The Sacramento Bee the addition of two deep-pocketed investors from Southern California was key to solidifying the city’s bid. And it came at nearly the 90th minute. Next month, the league board meets to discuss adding a 28th team.
Speaking to The Sacramento Bee on Friday evening, Garber said Sacramento and St. Louis are not only the frontrunners to win a team this year, the two have submitted “the strongest bids by far.” Garber declined to say whether one of the cities, both with solid soccer histories, is in the lead.
“Both are strong bids, both are great markets, both of them have worked very hard at the political leadership level and very much so at the ownership level, and certainly in each market fans have shown an enormous level of support,” Garber said.
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The commissioner’s comments come as welcome news to Sacramento, which has fallen short for years as it pursued top-division soccer, touting its success with second-tier Republic FC only to lose out to Cincinnati, Nashville and Austin.
Sacramento simply did not have the financial heft in its previously composed ownership group to meet the exacting standards of a fast-rising and expensive league, MLS officials said. The entry fee to join the league has hit $150 million and could be higher than that by the time MLS picks the league’s next city. The cost of a new stadium in the downtown railyard is expected to be $300 million.
And MLS teams are not yet certain money-makers, the commissioner said. Ownership groups need to be strong enough to invest in promoting and building their product without necessarily making a profit in the short term.
“We are still operating with a start-up mentality,” Garber said. Under that scenario, “there was very little chance that there was an opportunity” for Sacramento to win an MLS franchise until it landed lead investor Ron Burkle, a billionaire businessman, movie producer and owner of the Pittsburgh Penguins of the National Hockey League.
Burkle and his partner in the venture, Matt Alvarez, a longtime Hollywood film producer with a string of hit movies, stepped onto the scene publicly last month when Mayor Darrell Steinberg announced the pair had signed a deal to take control of the Republic FC brand, contingent on winning an MLS franchise agreement.
But Burkle and Alvarez have been in the mix behind the scenes for more than a year, Garber said, talking with MLS and city officials “to make sure it made sense for them ... and determining whether this would turn out to be something that was a proper investment.” The Bee first reported their interest last year.
Garber said he first spoke on the phone with Burkle about joining the Sacramento effort in December 2017.
“I have a lot of respect for everything Ron has achieved both as a businessman, but also Ron is a very well-respected owner in the National Hockey League and has done a terrific job with that club,” Garber said.
Speaking to The Bee last week, Alvarez said the more he and Burkle explored the possibility of operating a franchise here, the better it looked. “We got very excited about Sacramento very quickly,” he said. “This is an amazing city. It’s already over the cusp of being a very cultured, diverse, great city that has a lot to offer to a lot of different people.”
Alvarez said he believes his group has done nearly everything it needs to persuade MLS that Sacramento should be the next city chosen. Burkle and Alvarez recently made a presentation to Garber in New York. “We came out of that meeting feeling confident with where we sit,” he said. “We’re in a great position.”
Burkle and Alvarez were recruited by Republic FC chairman Kevin Nagle, team president Ben Gumpert and the mayor. Gumpert, speaking Friday night, said the group is “as optimistic as ever about what lies ahead for our fans and our city.”
Garber said expansion will be a key discussion item at the league’s Board of Governor’s meeting next month in Los Angeles. Sacramento and St. Louis may be asked to make presentations. But Garber declined to say if the league will be ready to choose the 28th team next month.
“We have committed to Ron and Matt, and to the mayor, and to St. Louis that we will make a decision before the end of the year and very likely much sooner than that,” Garber said.
Alvarez was in Sacramento on Wednesday to continue negotiations toward a “term sheet” business agreement with city officials. Steinberg has said the city will not invest in the stadium to the extent it did with the Kings’ Golden 1 Center, but he will ask the city to set up an infrastructure financing district for the 31-acre stadium site east of 7th Street in the downtown railyard, waive some development fees and allow the team to build several digital billboards.
Steinberg said he hopes to have a deal in hand to bring to the City Council for approval before the MLS board meeting. “Then it is a full pivot toward the league to not only make our case, but to say we have stepped up big time,” the mayor said.
Burkle, a supermarket tycoon who seldom speaks publicly, previously headed a group that planned to buy the Sacramento Kings when the Maloof family was threatening to move the team. Burkle dropped out of that effort. But, according to Steinberg, the businessman has maintained a strong interest in Sacramento.
Burkle, described as a huge sports fan, has owned the Penguins hockey team for 20 years. He was seen on national TV enthusiastically cheering at the Super Bowl a month ago in a luxury box with Gisele Bundchen, the wife of New England Patriots quarterback Tom Brady.
A new MLS franchise would take the place of Republic FC, which has represented Sacramento since 2014 in the second-division United Soccer League, but would keep the Republic FC name.